The Employer Identification Number (EIN), Social Security Number (SSN), and Individual Taxpayer Identification Number (ITIN) are all types of Taxpayer Identification Numbers (TINs). They are used in the United States, but they serve very different purposes. Issued by the Internal Revenue Service, these numbers help identify individuals and businesses for federal tax reporting and compliance. Before you can file a tax return or access certain tax benefits, you typically need the appropriate identification number assigned to you. Financial institutions, employers, and other organizations may also request one of these numbers for verification, reporting, or regulatory purposes.

Although EINs, SSNs, and ITINs are all tax identifiers, they apply to different groups. These groups include businesses, employees, independent workers, and individuals who are not eligible for a Social Security number. Because the rules and uses vary depending on your situation, it’s important to understand what each number is designed for. In this article, we’ll break down the key differences between EIN, SSN, and ITIN so you can determine which one applies to you and how each is used. Keep reading to learn more.

EIN or Employer Identification Number 

An Employer Identification Number serves as the social security number for businesses. But just to be clear, it is not needed by all businesses. For instance, the single-member LLC and sole proprietors do not legally require you to get an EIN. Only the companies that are hiring employees need to get the EIN. Here is all you need to know about it

What is an EIN?

Employer Identification Number, the EIN, is also known as the Federal Employer Identification Number (FEIN), or the Federal Tax ID Number. It is a nine-digit number that is issued by the Internal Revenue Service (IRS). It has the format of XX-XXXXXXX. This number is used by the IRS to identify a business entity and apply the suitable tax laws for it. In short, it is like the Social Security Number, just that it is for a business. 

Obtaining the EIN is important for every company that is operating in the USA. As soon as the company gets its EIN, it stays the same until:

• Partnerships: If the partnership incorporates, ends, and a new partnership is formed, or one partner takes over and runs the business as a sole proprietorship.
• LLCs: The IRS does not have a separate tax classification for LLCs, so different rules apply depending on how the LLC is taxed. You can learn more about them here.
• Sole Proprietors: If you incorporate the business, inherit or buy a business and operate it as a sole proprietorship, switch to a partnership, or become subject to bankruptcy proceedings.
• Corporations: If a statutory merger creates a new corporation, if the business changes to a sole proprietorship or partnership, if it becomes a subsidiary using the parent company’s EIN, or if it receives a new charter from the Secretary of State.
• Trusts: If one grantor creates multiple trusts, if a trust becomes an estate, if a living trust ends and distributes assets to a residual trust, or if an inter vivos (living) trust becomes a testamentary trust.
• Estates: If a trust is created using estate funds, or if the estate continues to operate a business after the owner’s death.

Additional Entities Required to Apply for an EIN

Along with this, the following entities also have to get the EIN:

• Nonprofit organization: They need it to apply for the tax exemption, and it is also used by the donors to report the donations made.
• Personal service corporations: Any owner that is performing personal services in the field of the performing arts, actuarial science, architecture, engineering, consulting, accounting, law, health
• Household employers: Any person hiring someone to help in their homes, and the agents acting on their behalf
• Real estate mortgage investment conduits (REMICs): They are treated as partnerships by the IRS.
• Individuals filing for bankruptcy under Chapter 11 or Chapter 7 of the US Bankruptcy Code.
• Employee benefit plans

Note: If any third party handles your taxes, they too need to have their own tax identification number. 

It is important to note that your EIN cannot be canceled, expire, or be assigned to someone else, even when the entity ceases to exist. All you need to do is contact the IRS when you are closing your business to close the EIN account associated with it. To do this, you need to send a letter that has the legal name of your business, the address, EIN, and why you are closing the account. 

Why does a business owner need an EIN?

There are many uses for the EIN for businesses. Here are some of the benefits that you get from using it:

• Hiring employees: The most common reason to obtain an Employer Identification Number (EIN) is to hire staff. If your business has—or plans to have—even one employee, the IRS requires this nine-digit number to track payroll taxes and report tax information.
• Opening a bank account: If you are about to open a business bank account in the USA, you will need your company’s EIN for it.
• Changing Your Business Structure: You are generally required to obtain a new EIN if your business undergoes a fundamental legal change. For example, this may occur when a sole proprietorship incorporates or when a single-member LLC adds members and becomes a partnership. Conversely, simple operational updates—like changing your business name, relocating, or switching from “member-managed” to “manager-managed”—do not typically require a new number, as these do not change the underlying tax entity.
• If you want to establish business credit, it is different from personal credit and is based on your business’s spending history and the EIN. 
• Filing employment, tobacco, alcohol, excise, or firearm taxes.
• Establishing retirement plans, profit sharing and pension: If you want to create these plans, you will need the EIN as you will be considered to be the plan administrator. 

How to obtain an EIN? 

Applying for an EIN is a free service provided by the IRS. The process requires the following:

• The “Responsible Party”: Every application must identify a “responsible party”. This person or entity must provide their legal name and their own taxpayer identification number (either an SSN or an ITIN) on the application form.
• Online Application: This is the most efficient method; by visiting the IRS website, your information is validated during the session, and you will receive your EIN instantly.
• International Phone Application: Applying by phone is strictly reserved for international applicants. You can call 267-941-1099 (not a toll-free number) between 6:00 am and 11:00 pm ET, Monday through Friday.
• Mail or Fax: These methods require you to file Form SS-4. Note that applying by mail is the slowest method and will take significantly longer than other options.

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SSN or Social Security Number 

The Social Security Number (SSN) is a tax identification number (TIN) that all US residents and lawful aliens need to have to get payments, salaries, and use plenty of vital services. It is the only TIN issued by the Social Security Administration. Let us understand more about this to understand the difference between EIN, SSN, and ITIN.

What is an SSN?

A Social Security Number (SSN) is a nine-digit number that has the format of XXX-XX-XXXX. It is assigned to all the permanent residents and US citizens. Any person who works in the US, or has the right to work in the US, regardless of the employment type, has to have an SSN so that they can get their salaries or self-employed payments. 

Apart from getting a job and being paid, people need the SSN for:

• Registering to vote
• Applying for Earned Income Tax Credit (EITC)
• Collecting Social Security benefits
• Taking loans
• Opening their individual bank accounts
• Registering their motor vehicles
• Using other government services

It is important to note that not everyone is eligible for a Social Security Number (SSN), regardless of their immigration status. Generally, the Social Security Administration (SSA) only issues SSNs to U.S. citizens and non-citizens who have been granted valid work authorization by the Department of Homeland Security (DHS). Your unique nine-digit number is printed on the Social Security card provided after your application is approved. Although you should memorize your number for daily use, you should keep the physical card in a secure location. This helps protect against identity theft. Individuals who are ineligible for an SSN but have a federal tax filing requirement must apply for an Individual Taxpayer Identification Number (ITIN) instead.

Why need an SSN?

The SSN is important to get you hired for a job or to get any sort of payment. It also helps you obtain your driver’s license. But what does the SSN do for small business owners? Well, here is how the SSN helps a business owner:

• Filing annual tax returns: You can use your SSN or EIN when filing for your business tax returns (it is mostly based on the type of entity you own, as explained above for EIN).
• Federal loan applications: A lot of entrepreneurs look for federal loans for extra-small business funding. This TIN can help in getting a credit check and determining eligibility for a federal loan.
• Opening bank accounts: This is a main requirement for every personal and small business bank account in the US. For businesses, you will also need your EIN to open a bank account. 

The USA residents usually do not need to worry about getting the SSN since they would already have gotten one from the SSA. All they need to do is safeguard this number. And if you have a business, then the next thing you need to get is the EIN. 

How to get an SSN? 

To get the SSN, you will need to fill out the Form SS-5, which is the application for a Social Security Card that comes with the SSN. It is free to apply for this TIN, and you will not have to pay any fee to the IRS for it. You can also get it by calling 1-800-722-1213 or by visiting your local Social Security office. To get the SSN, you will have to submit evidence of your age, identity, and US citizenship or lawful alien status. 

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ITIN or Individual Taxpayer Identification Number

The Individual Taxpayer Identification Number (ITIN) is issued by the IRS to individuals who are not able to obtain an SSN but have to report taxes. ITIN, unlike the EIN and SSN, can expire and has to be renewed. Let us understand more about this. 

What is an ITIN?

The Individual Taxpayer Identification Number (ITIN) is a number that is issued by the IRS. They use it to denote the non-residents for federal tax reporting. ITIN looks a lot like the SSN, but the ITIN always has 9 as the first digit – example – 9XX-XX-XXXX. Basically, this TIN is given to those people who do not have the right to get an SSN but need a US TIN. These people usually include the non-resident aliens, people with temporary visas, and those people who might have a US filing or reporting requirement under the IRC (Internal Revenue Code). 

To be more precise, the people who need the ITIN include:

• People who need to have a TIN or file a federal tax return and are:
  • Non-resident alien professors, researchers, or students filing a US tax return or claiming an exception
  • Non-resident aliens claiming tax treaty benefits
  • Spouse of a US resident alien/citizen/non-resident alien visa holder, or dependent on them
  • Non-resident aliens/US resident aliens
• People who are not eligible to obtain an SSN

Getting an ITIN does not mean a person can work in the United States. It also does not make someone eligible for the Earned Income Tax Credit as a dependent. An ITIN does not qualify a person for a Social Security number or Social Security benefits. If your SSN application is pending, you cannot apply for an ITIN. You can only have one of these numbers.

Why do you need an ITIN?

The ITIN has a few purposes, most of which are related to compliance and the US tax laws. As per the IRS, the things that a person cannot do with an ITIN include:

• You will not be eligible for Social Security benefits just because you have an ITIN.
• Having an ITIN does not mean you can work in the US.

So, the real purpose of the ITIN is that it gives entrepreneurs the option for federal tax reporting. These numbers do not have any other purpose for the business owners. This is still an important function for making sure that your US tax returns have been filed. So, if you know you need the ITIN, then it is important to get it quickly. 

How to obtain an ITIN? 

To get the ITIN, you will have to complete the Form W-7 to submit to the IRS. The W-7 would need you to give documents that show your foreign/alien status and the true identity of each individual. All these documents can be mailed to the address on the Form W-7. You can also give it by hand by walking into the IRS walk-in offices or process your application via an Acceptance Agent that is authorized by the IRS. Acceptance agents are entities that are authorized by the IRS to assist applicants in getting their ITINs.

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Major Differences between EIN, SSN, and ITIN 

So, to put all that we have learned about the EIN vs SSN vs ITIN in a nutshell:

• EIN is like the SSN but for businesses, where single-member LLCs and sole proprietors don’t need to get it. To obtain the EIN, you need to fill out the Form SS-4.
• SSN is legally required for all US citizens and lawful aliens to get payments, salaries, and use a lot of other services in the country. To get this, you fill out the Form SS-5. 
• An ITIN is for those who cannot get an SSN but have to report their taxes. To get this, you need to file the Form W-7.

Now, let us get into the comparison and find the difference between EIN, SSN, and ITIN in detail. 

Can you use an EIN instead of an SSN?

Yes, you can. In fact, there are some cases where you are highly recommended to use the EIN instead of the SSN. For instance, the freelancers, sole proprietors, and single-member LLCs who do not hire anyone else can use their SSN for taxes. Nonetheless, EIN is public information, and SSN is a private one for safety purposes. This is why it is better to use an EIN in these cases, too, along with your SSN. 

In fact, here are some reasons why you should use your EIN instead of your SSN:

• Guarding your privacy
• Appearing more professional in the eyes of institutions and your clients
• Separating personal finances from business finances

At the end of the day, if you are a business owner, it is important for you to obtain an EIN. 

Need Any Assistance in obtaining an EIN for Your Business?

If you need some help to obtain the EIN for your business, then IncParadise can help you with it. The team would not just help you get this; they can also help you with many other things, like opening a bank account, mail forwarding, and so on. In fact, if you have not yet started your business, we can help you with the registration and incorporation of your business. To know more, contact us today!

Last updated: April 2026